CITY OF LONDON

IN PRAISE OF COMPANY DIRECTORS GATHERING MOMENTUM THE CITY'S THEATRE ... NO GAINS ON THIS TAX OUTLOOK FOR SHIPPING

Hedley Shepherd Laurence Corley K. M. O'Shea Derek Forbes I. Prosser

In Praise of Company Directors

By HEDLEY SHEPHERD

A 7 IDE which has been flowing for an astonish-

ingly long time, without showing, alas, any, signs of ebbing, is the dislike, indeed vilification, of that truly long-suffering body of men, com-

pany directors. Thus, in 1732, Alexander Pope, in Epistle 3, to Lord Bathurst, of his Moral Essays, In Five Epistles to Several Persons, reflected Popular opinion when he declaimed The tempter saw his time; the work he plied; Stocks and subscriptions poured on every, side, Till all the demon makes his full descent In one abundant shower of cent, per cent., Sinks deep within him, and possesses whole, Then dubs director, and secures his soul.

Two hundred and thirty years later, the parish magazine of St. Michael's, Highgate, London, asked the congregation to pray for company directors, the editor commenting: 'I think com- pany directors need a lot of praying for, but I don't want to sound too cynical.' To read the press, to hear people talk, one would believe company directors were nothing but a lot of no-goods, bloated blighters who draw fat fees for virtually nothing, accept golden handshakes, give themselves stock options, and live fabulously on fiddled expense accounts. In the popular image, company directors are much inferior beings to politicians and civil servants, who always run things so smoothly, so efficiently and so success- fully. Yet when did one last hear of a politician or civil servant giving himself ulcers or having a coronary thrombosis through overwork?

Or for that matter, when was the last time that a company director was buried in Westminster Abbey as a national hero for the way he had raised the lot in life of so many of his fellow-men, or for having provided so many of them with employment? There is more real merit in being a company director than in being a military man, dedicated, in this so-called civilised age, to trying to kill or maim his fellow-men, whatever

Patriotic camouflage might convey. Certainly, there is irony in the avidity with which retired and axed politicians, civil servants and top mili- tary men grab company directorships. Is there any reason other than plain stupidity Which makes the average person think so ill of company directors? Have they really no clue as

to What makes things tick? For in the private- enterprise free world, it is certainly the company directors who do make things tick. In this

country alone, it is the company directors who Provide the bulk of the jobs that occupy the

twenty-three million civilian employed; 'who in their classical role of entrepreneurs bring capital and labour together to create production, and who are thus largely responsible for the £32,000 million national output; whose untiring efforts are mainly responsible for the £3,850 million of exports a year this country achieves in its struggle to maintain and raise its standard of living; and who are responsible for the productive employ- ment of industrial capital with a nominal value of £10,500 million and a market value of £34,500 million, thereby at the same time providing their fellow-citizens— and there are about 31 milli-on company shareholders in this country—with an annual income of over £1,000 million.

With these facts in mind, one might well assert that never, never was so much owed by so many to so few. It is true that compared with a 'total adult population of about thirty-six million in this country, there are probably around 1,000,000 company directors (there are 375,000 companies —11,000 public, 364,000 private---with an average of three directors apiece). But there are only about 39,000 members of the Institute of Direc- tors, while the Directory 9t..)irectors lists around 35,000 people as directori, °veraging some six to eight directorships each, and this select 4 per cent. of all directors are estimated to be responsible for some 80 per cent. in value of all companies.

Nor is this all. For company directors as a species go back three to four hundred years, and it was company directors •who built up the might of the British Empire—the directors of the great East India Company, the Hudson's Bay Com- pany and the British South Africa Company; who built railways in every continent; organised the search for and production of gold, oil, dia- monds, copper, lead, zinc, tin, asbestos, bauxite and uranium; and developed the tea, rubber, sugar and sisal estates. It was not the politicians, the civil servants, the military men, and certainly not the trade union officials.

The popular tendency to glorify the politicians, the military leaders, and even the trade union officials, and not to glorify company directors, who clearly are much more valuable members of the community, is all the more remarkable when one considers two other aspects of the matter— first, the job that directors do, and secondly, how they achieve and retain their position as direc- tors. It is their job to anticipate the people's wants and needs, estimate costs and selling prices, build and extend factories, equip them with machines and canteens, recruit and organise labour, secure the raw materials, arrange for outside com- ponents, plan sales and advertising campaigns, sponsor research, raise capital to do all this, and do it all so well, and with ever-increasing efficiency, that profits are made so that everyone connected with the enterprise prospers.

Pretty clearly, it is no push-over being a com- pany director. It is also no push-over becoming one. In fact, company directors only become so by merit and remain so by merit—that is, because they are more able than their fellow-men. The forces of competition see to that. If you doubt it try to become a company director. Men do not tolerate a colleague as a director unless he is on top of his job. If he doesn't do a proper job of running his company successfully, he's out on his ear—thrown out by other company directors.

Yet with all this so patently true, it is disturb- ing that in recent years the denigration and chivvying and hampering of directors has in- tensified, just as though directors were parasites and pariahs. Indicative of the marked growth in recent years of malice and political vindictive- ness against company directors is the fact that they have had to strengthen their organisation to defend themselves. The Institute of Directors, founded as long ago as 1903, had only 400 mem- bers in 1948 (compared with its present near 40,000), in which year the mounting campaign against company directors resulted in the In- stitute being reorganised, with distinguished men of business recruited to its Council.

To their shame, Tory governments have con- tinued the Socialist line, with petty and petti- fogging regulations on travel and entertainment expenses, etc., with Mr. Selwyn Lloyd's first Budget establishing a new low with its small- minded restriction on the price of the car that the managing director of a company with 20,000 em- ployees may ride about in. It is no exaggeration to say that Britain would be a vastly better country if the politicians did their job as well as company directors do theirs. The fact speaks for itself that one of Britain's top company directors had to be called in to sort out the mess the politicians had made out of our nationalised railways. And if Britain wants a better growth rate than it has had in the past, it had better try the sensible policy of being kinder to company directors, the men on whose efforts it rests.